Turner, Mgm: What Hath Mogul Bought?

The deal had just been closed and Ted Turner was in an ebullient mood. After losing his bid to buy CBS, Turner was about to become owner of MGM/UA Entertainment Co., expanding his media web to include one of the eight major studios.

Gathering MGM's top executives on a Monday morning in early August, Turner quickly assured them that their jobs were secure. But he made it clear that he wanted MGM to return to making family-oriented movies. "I'm not going to tell you guys how to do your job," one observer quoted Turner as saying, "but I think we should be making more epic movies that appeal to the whole family--movies like 'Shane' and 'Gone With the Wind.' "

Later that week at a follow-up meeting, David Gerber, president of the Television-Broadcast Group for MGM, stood up and announced that Turner's mandate would be hard to carry out. "We have to try harder around here," he said, "not because we're No. 2, but because we're No. 8."

The remark drew nervous waves of laughter, but, like every good joke, it contained a measure of truth. Ted Turner was a year old in 1939 when his favorite movie was released. "Gone With the Wind" captured nine Oscars and MGM was a dominant force in Hollywood (the Atlanta-based Turner later named his son Rhett). In 1939, MGM offered up four of the 10 films nominated for best picture. ("Gone With the Wind" won. MGM's other three contenders were "Goodbye, Mr. Chips," "The Wizard of Oz" and "Ninotchka.")

FOR THE RECORD Los Angeles Times Wednesday September 18, 1985 Home Edition Calendar Part 6 Page 4 Column 1 Entertainment Desk 1 inches; 19 words Type of Material: Correction Frank Yablans, former president of MGM/UA, joined the studio in February, 1984, not last February as reported in Tuesday's Calendar.

But what sort of studio has Turner purchased today? It is clear that he has acquired a library packed with film classics that will fuel his satellite network with programming for years. (The deal landed him 2,400 film titles, including "Oz" and "Singing in the Rain," along with a variety of television programs made under the MGM logo, including "Fame.")

He also has purchased a debt-laden (about $565 million total) studio that in recent years has been in constant turmoil. Turnover within upper management has led to six different production heads (between MGM and UA) since 1980. Even in the mercurial world of the movie business, that is considered a dangerously high rate, and it has has had a devastating effect on the product pipeline at the studio.

There may be even more changes to come: One current rumor says that Universal Chairman Frank Price may move to head up UA. According to high-ranking insiders at Universal, Price and Turner had dinner together recently. (Price did not return a reporter's calls.) Industry insiders also expect producer Ray Stark, said to be disenchanted with management at Columbia, to move his operation from the Columbia lot to MGM, where he will be near close friend Turner. Earlier this year the two announced they were forming a partnership, called Turnstar, but nothing ever seemed to come of it.

According to industry analyst A. D. Murphy, MGM has consistently ranked near the bottom of the eight major studios in terms of market share for the last three years. This year looks to be no exception. As of late August, MGM had earned a mere 5.5% of total box-office receipts for the year. Murphy argues that the rapid turnover has led to diminishing returns. "Every time they have one of those big changes at the top, all of the movies in development at the time go right out the door," says Murphy. "And MGM remains in the cellar."

It has been a rather empty cellar. With the exception of two annual evergreens--a Rocky movie and a Bond film--and occasional bona-fide hits like "Poltergeist" and "WarGames," the studio has had little luck with its own movies, and in the last two years has filled its distribution system largely with "pickups," movies distributed but not produced by the studio. Failed movies, such as "Reckless," "Electric Dreams" and "Ice Pirates" in 1984 and "Heavenly Bodies," "Cat's Eye" and "Gymkata" this year, have hurt the studio's credibility with exhibitors. "They've had so many bad films they can't muscle their way into the good theaters," says one producer currently making a film at MGM. "You can't run a distribution system on two movies a year."

The combination of little in-house product and poor box-office performance has also had an effect on the creative community. MGM/UA today is no longer perceived by leading agents, writers or producers as a first-choice lot to make a movie. "They are kind of medium players," says one rival studio head. "Let's put it this way: I don't bump into (compete with) them on deals very often. They have kind of become the last stop on the list."

Says one prominent literary agent, who insisted on anonymity: "Until we see what happens with Turner, I wouldn't put any of my top clients at the studio right now. What's the point of locking a client into a one- or two-year situation when no one knows what's going to happen there?"